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Ron Kauffman

worked 6-years as host of live talk radio shows producing more than 600 live programs dealing with boomers and seniors concerning issues of health, wealth and lifestyle.  His weekly podcasts continue on the Internet on his website.

Today, Ron consults with seniors and adult children of aging parents on many aspects of aging, and is the author of the book Caring for a Loved One with Alzheimer’s Disease.

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The Reality of Comparative Numbers

by Ron Kauffman on January 25, 2016 in Economy & FinancesRon Kauffman 2

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AN INTRODUCTION BY MYCHAL MASSIE

“I am pleased to welcome Ron Kauffman as the newest member of The Daily Rant (TDR) Team.  Ron brings a wealth of writing experience that I know serve to enlighten and inform you in the tradition you have come to expect from TDR.  Please welcome him with your comments, likes, retweets, etc. Mychal Massie”

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The Reality of Comparative Numbers

by Ron Kauffman

A reader recently submitted a list of comparative numbers showing that under Obama’s presidency, a series of eight economic and social metrics prove that we’re better off today than we were since the last year of G.W. Bush’s presidency. Let’s take a look at each of those metrics and find out the truth.

1. Unemployment: Bush 2008 – 7.2% – Obama today 5.1% (U-3 Reporting)

It looks as if we’re better off after almost 8-years under Obama, but these numbers report unemployment using the U-3 data, the officially recognized rate of unemployment, measuring the number of unemployed people as a percentage of the civilian labor force.

The U-3 is misleading and it might be helpful to understand what the unemployment standards are, and why using the U-3 measurement versus the U-6 standard skews the facts. Let me explain.

There are 6-levels of Unemployment measurements, U-1 through U-6.

U-1 – Persons unemployed 15 weeks or longer, as a percent of the civilian labor force

U-2 – Job losers and persons who completed temporary jobs, as a percent of the
civilian labor force

U-3 – Total unemployed, as a percent of the civilian labor force
(the official unemployment rate)

U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor
force

U-5 Total unemployed, plus discouraged workers, plus all other persons marginally
attached to the labor force, as a percent of the civilian labor force

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus
total employed part time for economic reasons, as a percent of the civilian labor
force plus all persons marginally attached to the labor force



 

Persons marginally attached to the labor force are those who currently are neither working nor looking for work, but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

What these technical measurements mean is that U-3 leaves out all out-of-work people who are willing and able to take a job but who don’t fit the narrow BLS definition of “unemployed.”

Compared to the U-3 rate, the U-6 unemployment rate includes all of these cases and is a much more honest rate of unemployment, since it includes discouraged workers, underemployed workers and other folks who exist on the margins of the labor market. The U-6 rate provides the true unemployment rate.

The truth is that Obama’s 5.1% current unemployment rate is a lie. When you look at the entire record, under G.W. Bush, the U-6 remained under 10% for 93 of the 96-months he was in office and didn’t go above 12% until the last 3-months of his presidency. The increase was in large measure due to federal intervention in the housing loan industry, thanks to Fannie Mae and Freddie Mac. Their mismanagement led to the crisis in real estate and housing and ultimately the Great Recession.

When Obama took office, the U-6 was 14.2%, and under his policies rose to a high to a high water mark of 17.1% and didn’t fall below 14% until 2013. Since that time it has slowly came down over the past two-years to where it is today, an astounding 9.9%.

2. Cost of a Gallon of Gasoline

At the end of Bush’s second term in December 2008, the national average for a gallon of gasoline had fallen to 2001 levels of about $1.71. In January 2009 when Obama took office, gasoline prices were averaging $1.90 per gallon and continued to climb until April 2011 when the national average hit its peak of $4.02 per gallon.

President Obama never took responsibility for the $4/gallon rates, but today takes credit for the lower prices when the reality is that over the past decade, American oil production has grown because of the increased effectiveness of extracting crude oil from shale. The United States now produces nearly as much crude oil as Saudi Arabia.

Adding to the increase in the more costly procedure of extracting crude oil from shale is the fact that Saudi Arabia has flooded the international market over the last year with low-priced crude oil in the hopes of squeezing the shale oil producers out of the market. According to CNN Money, crude oil prices were at $100 per barrel in November 2014 but have since tumbled below $30 per barrel.

The truth is that over Obama’s term as president, average gasoline prices were higher than during George Bush’s 8-years in office, and at $2.00 per gallon have yet to return to the lower average price of $1.71 under Bush.

3. Uninsured Rate for Healthcare Coverage

At the end of Bush’s term in 2008, the uninsured rate was about 15%. Obama spent almost $1-trillion on the ACA (Obamacare). The estimates according to an April 2015 Gallup study, a May 2015 RAND Corporation study, and numbers from both the HHS and CMS studies in 2015 show a current uninsured rate of 12% or almost 30-million uninsured Americans. That’s about 9-million fewer than the number of uninsured when Obama first promised to provide health care coverage for all uninsured Americans, and cost us about $111,000 per person placed in the new coverage.

4. Barrels of Oil Imported

At the end of Bush’s presidency in 2008, oil imports were about 6.4 million barrels per day. Today, the last year of Obama’s administration, imported oil levels are the lowest they’ve been since 1987, falling nearly 60% to 2.6 million barrels per day.

While Obama would like to take credit for this reduction in imports, it has absolutely nothing to do with him. American innovation in hydraulic fracturing is what has spurred the domestic energy boom. As OPEC imports fell by 3.8 million barrels per day, America had increased oil production from 5.1 million barrels per day in 2008 to over 9-million barrels per day as of October 2014.

This improved efficiency in the costs of fracking brought down the price of oil. In addition, America was able to replace the 3.8-million barrels that had previously been imported with a domestic production increase of the additional 5.2 billion barrels eliminating the need for imported oil.

5. Teen Pregnancy

Obama claims that since his election, unwanted teen pregnancies have been reduced from 40.2 per thousand teens at the end of Bush’s term in 2008 to historic lows of 26.5 per thousand today.

While that would be something to celebrate, the truth is that the teen pregnancy rate has declined not only for the nation as a whole, but also for every state since about 1990. Since the early 1990s, the rate has dropped 56% among both black and white teens, and by 51% among Hispanic teens. Nonetheless, wide disparities in pregnancy rates by race and ethnicity persist, with rates among both black and Hispanic teens remaining twice as high as among their non-Hispanic white peers.

Between 1992 and 2010, state decreases ranged from 25% in West Virginia to 62% in California. The reason pregnancy rates have fallen has nothing to do with Obama, but is because teens are having less sex and those teens that are sexually active are using contraceptives and using them more effectively. Researchers have analyzed the role of both over the last several decades, and they have concluded that the declines can primarily—although not exclusively—be attributed to improvements in teens’ contraceptive use.

6. Iran’s Centrifuges

John Kerry, Obama’s Secretary of State declared in July of last year that when President Obama came into office at the end of the Bush presidency, he was “dealt … a hand of 19,000 [Iranian] centrifuges already spinning,” and that Iran has “12,000 kilograms of highly-enriched uranium, and that’s enough if they enriched it further for 10 to 12 bombs.” The truth is that Iran has 12,000 kg of low-enriched uranium more than the 6000 centrifuges the administration claims they’ve retained.

The only problem is that claim of 6,000 centrifuges does not align with International Atomic Energy Agency (IAEA) data. Their reports showed that most of the growth in the number of first-generation IR-1 centrifuges at Iran’s main fuel enrichment plant at Natanz occurred after January 2009, when Obama took office.

According to IAEA reports, “…the number of IR-1 centrifuges at Natanz …did climb significantly during the George W. Bush administration, reaching 2,132 in May 2007, and then 5,537 by the time Obama arrived at the White House in early 2009.

Within months the number increased to 7,216, and by the end of that year reached 8,692. By Nov. 2012, Iran’s Natanz plant had 10,414 centrifuges and by mid-2013 the number had shot up to 15,416, and from May last year until the most recent report, in May 2015, the IAEA has reported an unchanged total of 15420.

Under the JCPOA agreement recently reached in Vienna, Iran has agreed to reduce its total number of centrifuges to 6,104 for the next ten years. So the bottom line is that Obama is leaving the next president about 4000 fewer centrifuges in Iran’s facilities, but with greater destructive capabilities in what they can produce. By using the approximately 9,000 first generation centrifuges operating at its Natanz Fuel Enrichment Plant as of October 2015, Iran could theoretically produce enough weapon-grade uranium to fuel a single nuclear warhead in less than 2 months. This timetable is longer if Iran operates fewer centrifuges, or feeds the machines with natural uranium rather than low-enriched uranium.

The reality is that most of the increase in Iran’s centrifuge numbers occurred under the current administration. And under the just-completed Joint Comprehensive Plan of Action (JCPOA) agreement, Iran will have the international community’s blessing to keep more centrifuges than it had when Obama entered the White House.

7. GDP Growth

Since Obama took office, the Annenberg Public Policy Center reports that:
• The economy has added nearly 8.4 million jobs — more than six times the number gained under George W. Bush.
• The number of job openings doubled, to a record 5.7 million.
• Nearly 15 million fewer people lack health insurance coverage.
• Corporate profits are at record levels; stock prices have more than doubled.
• However, median household income was down 3 percent as of 2014, and the official poverty rate was 1.6 percentage points higher.
• The rate of home ownership has dropped to the lowest point in nearly half a century.
• The federal debt owed to the public has more than doubled — up 107 percent.

However, there are a few other things in that report that you should be aware of:
• The Census has released annual figures on income and poverty covering 2014. They provide a bleak picture of the economic well-being of most Americans during the first six years of Obama’s tenure.
• Median household income last year was $53,657. In “real” income, adjusted for inflation, that was $1,656 less than in 2008 — a decline of 3 percent. And it was 7.2 percent below the peak year of 1999.
• The same Census report showed that the number of people living in poverty went up in 2014 to nearly 46.7 million — which is 6.8 million more than in 2008. The official poverty rate — meaning the percentage of the population living below the official poverty line — was 14.8 percent last year, which is 1.6 percentage points higher than in 2008.
• The number of people receiving food stamps as of June, the most recent month on record, was more than 45.5 million Americans. That’s 4.8 percent lower than the record level set in December 2012, but still 42 percent higher than it was when Obama took office in 2009.

8. The Dow Jones Performance

There’s little doubt that since Bush left office with the Dow at just over 10,000, that corporate profits have soared under Obama, setting record after record. Much of this success has been attributed not to Obama, but the zero interest rate policy or ZIRP instituted by the Federal Reserve for the past several years as Quantitative Easy was used to manipulate the market and artificially keep it high.

Stock prices have declined sharply in the last several weeks and the possibility of another recession now looms very large.

Federal debt, deficits and spending are out of control, and total public debt is over $19 Trillion. While it’s true our debt doubled under G.W. Bush, it has now almost tripled under the Obama administration.

The bottom line is that while President Bush was absolutely not a fiscally responsible leader as he finished his final term in office, Obama will be leaving office with America being in far worse shape in almost every category you care to measure. In addition, he has destroyed our relationships with virtually all of our allies, decimated our military, increased racial tensions in our nation, and brought the increased threat of terrorism to our shores with his Muslim immigration policies.

You can pick and choose from many statistical reports to make your argument appear to be honest and complete, but you can’t attribute any of the statements of America’s decline to anyone but Barack Obama.